Applied Optoelectronics is rapidly expanding production of high-speed optical networking products as AI and cloud infrastructure demand pushes customer requirements beyond the company’s available manufacturing capacity.
AOI said demand for its 800G transceivers and 1.6 Tb products is expected to outpace production capacity through mid-2027. During the second quarter, 800G product volume more than doubled sequentially as adoption of high-speed optics accelerated.
The company is responding with a major manufacturing ramp. AOI’s total production capacity is approaching 200,000 units per month, but management expects to have the capability to manufacture approximately 650,000 units of 800G and 1.6 Tb products per month by the end of 2026.
The capacity increase would represent more than a threefold expansion from current levels and reflects the infrastructure requirements associated with rapidly growing AI data centers. AOI supplies optical products that connect computing infrastructure and enable large amounts of data to move between servers and networking equipment.
The demand is already showing up in the company’s financial results. Datacenter revenue reached $107.7 million in the second quarter, compared with $44.8 million in the same period last year. CATV revenue also increased to $80.6 million from $56 million.
Overall revenue reached a record $191.9 million, compared with $103 million a year earlier and $151.1 million in the first quarter. AOI said Q2 marked its fifth consecutive quarter of record revenue. The company also returned to non-GAAP profitability, generating $5.5 million in non-GAAP net income, or $0.06 per diluted share.
AOI expects the growth trajectory to accelerate further in the third quarter. Revenue is projected at $255 million to $290 million, with non-GAAP net income expected between $10.1 million and $24 million. Non-GAAP EPS guidance is $0.11 to $0.26.
The combination of record revenue, rapidly expanding 800G shipments and expected capacity constraints through mid-2027 highlights AOI’s increasing exposure to the infrastructure buildout supporting AI and cloud computing.
KEY QUOTES:
“Q2 was a pivotal quarter for AOI. We delivered record revenue for our fifth consecutive quarter and achieved an important milestone as we returned to non-GAAP profitability in the quarter. Further, we saw a strong volume ramp of our 800G products, which more than doubled sequentially.”
“We continue to see robust customer engagement around our 800G transceivers and 1.6 Tb products, and we forecast that demand will continue to outpace our production capacity through mid-2027.”
Dr. Thompson Lin, Founder, President and CEO of Applied Optoelectronics
“We have a total manufacturing capacity approaching 200,000 units per month and continue to expect by the end of this year that we will be capable of producing around 650,000 pieces of 800G and 1.6 Tb products per month.”
Dr. Stefan Murry, CFO and Chief Strategy Officer of Applied Optoelectronics
